Monday, September 28, 2009
7:38:23 PM EDT

Oil Services

by
James Brown

Why We Like It:
Traders are buying the dip in the oil service stocks. Instead of singling out one specific company (since we already have DO on the play list) I'm adding the OIH oil services HOLDRs. Buy calls now on the bounce with a tight stop under Friday's low. Our first target is $124.00.

Please note that this is a slightly aggressive play. The OIH will be strongly influenced by the price of crude oil. Last week oil broke down under a key trendline of support. Yet rising tensions with Iran could keep oil from seeing any significant declines.

Suggested Options:
I'm suggesting the October or November calls. Octobers expire in about three weeks. My preference is the November $125 strike.